You can’t eat a credit score

A growing number of people in the UK can no longer afford the basic essentials of life. An explanation of the unique energy crisis facing British people in the 2020s.

The capitalist mantra that “a thing is only worth what someone is prepared to pay for it,” no longer applies. Judging by events over the last few years, it’s evident the balance of power has finally shifted from consumers to big business operators. These organisations, with the support of regulators and successive governments, can charge whatever they like regardless of affordability.

But, these are not conventional businesses vying for a piece of the action, they are essentially parts of the same monopoly selling the exact same products into just one consolidated market. There is no competition for their services and they all purchase their raw materials from the same suppliers. Added together, their buying power is phenomenal. So what’s the problem? Why are prices so high and so unaffordable for their customers when conventionally, one of the quickest ways to kill any business is to make what it produces too expensive.

The fact is, by any measure of good business, they have failed. They just haven’t publicly admitted it yet but that’s what’s happened. The trouble is, for a host of political reasons, they are the only suppliers of energy available to us and as such, they have absolutely no need or desire to seek out viable alternative suppliers or methods of production. Instead, they are doing nothing to change their business model and are challenging the government, and us, to bail them out. They say, quite rightly, that they are vital to our economy, and way of life, and demand we regard them as being too important to fail. Yet they are private companies so surely the risk of failure comes with the territory. They must be allowed to fail and when they do, the state must intervene, not by bailing them out, but by taking over their operations for the good of the nation. Not for political self-aggrandisement.

It’s no secret that economic and social chaos has been building for quite a while, some say for decades, yet little has been achieved to ease the burden of successive corporate failures (banks, Carillion and other government contractors, and numerous energy suppliers) being placed firmly on the shoulders of ordinary folk. And now our backs are breaking.

With inflation at near record levels and the employment market becoming increasingly insecure, the mix of necessities is unaffordable to a widening demographic. At least one from this list – energy, food, water, housing, clothing, transport, healthcare and communications – is regularly beyond the reach of many households at any given time. Our waterways and the air we breathe are heavily polluted. Small and medium-sized businesses, the UK’s biggest employers, have seen their overhead costs more than double in 12 months. In short, the United Kingdom, which is recognised around the globe as a rich and civilised nation, is on course for a systemic collapse.

Of course, I could rant at the government for not getting to grips with the crisis. But there are already more than enough voices out there critiquing a situation that most of us are living through. Respected journalists, comedians, and activists elaborately and repeatedly point out the obvious. For Christ’s sake, what’s the point? Moaning about a thing is not the same as doing something about it and the constant wall-of-blather leaves no mental capacity for exploring ways to speed up changes the UK desperately needs.

After 100s of hours of research, my conclusions may appear radical. But I’m not going to gild the lily here, we have gone way beyond pussyfooting around. Doing the British thing of burying our heads in the sand while assuring everyone that everything is simply fine, is ridiculous. We are not fine! Not by a long way.

I set off by asking a few basic questions: What does privatisation of national assets really mean? Who controls what in the energy industry? Where are we at with energy poverty? What percentage of the UK’s GDP is down to small and mid-sized businesses? Will businesses fold? Yup, really interesting stuff, right? But, important to know so I may achieve a rounded picture. As I dug deeper into government statistics, data from think tanks, academic theses and heuristic insights, the list of questions only grew. And every answer I discovered made me feel increasingly helpless and angry. Damn!

Big Energy (companies engaged in the UK Energy sector) don’t give a damn what actions politicians think they can take, mainly because they’ve already worked out, in minute detail, all the various scenarios any political intervention might take and, they’re not that worried. Their strategy, therefore, is to work the current system for everything they can get out of it, for now. Remember, their businesses are already well along the road to failure so they have nothing to lose and everything to gain by extorting as much profit as they can, while they can. They also know, without doubt, that politicians are ill-equipped both ideologically and intellectually to make any sustainable deals with Petro-States, Industry and especially Big Energy; aside from the obvious conflicts of interest, politicians simply don’t possess the strategic potency, the eye for detail or the negotiation skills. No, in the short term, Big Energy can remain confident that whatever “help” government provides to households will inevitably benefit their mega-profits and stave off the day of reckoning.

And delegating these tasks to Tsars and lickspittles invariably fails. On the occasions when politicians have attempted to fill key negotiating or implementation roles, it has not been because the candidates are skilled and able but because they are celebrities or party donors or cronies; people who grab the headlines – recent examples include COVID, PPE, Track and Trace and Brexit. Public money is being wasted on a monumental scale. The national good is not, and never has been, on the list of political priorities when it comes to getting the best deal for Britain. And so, we have ended up with a national utility sector that’s unfit for purpose.

Because of the unique way energy is supplied to British households and businesses, Big Energy has the whole country by the short and curlies.

Since the UK’s globally unprecedented privatisation experiment began in the early 1980s, politicians of every stripe have contributed to the monumental cock up. At the time, ordinary people could, and should, have done more to stop the madness or at the very least should have insisted on break clauses to review progress and make necessary changes to contracts. God knows enough economists and social anthropologists were warning against the privatisation of national utilities. Instead, 40 years of lazy administration, profiteering, self-serving politics and sheer incompetence have led to a crisis we haven’t witnessed since the 1930s and which, if allowed to run its course unhindered, will cause unimaginable hardship and potentially dangerous seismic shifts in British society.

For decades I have heard people say, “Oh, I don’t do politics” or “Leave politics to the politicians.” The majority of whom would consider themselves to be educated, intelligent people going about their lives, building a career, buying a house, having children, and doing the “right” thing. Well, let me tell you, this is where 40 years of you NOT DOING POLITICS has got us.

Citizens of the UK, our country is in a hell of a mess and the blame for allowing it to happen lies conclusively at our doors. Now it’s up to us to sort it out not just because we can’t rely on elected representatives to do so but also because they are particularly unsuited to the task without our superior experience. We must refuse more often, engage with new thinking, shout more loudly and hold politicians to account, by force if necessary.

My conclusions

Causes: Mythbusters! The Energy Crisis has not been caused by Russia turning off gas supplies to Europe. Neither has Ukraine got anything to do with it. Any of it. There is no explicit oil or gas shortage whatsoever. There are still sufficient reserves available and overall global demand has been pretty stable over the last 10 years.

The causes are very straightforward: wholesale energy costs are increasing exponentially due to Big Energy failing to manage its short-range supplies of fossil fuels and invest in alternatives. To be fair, though, governments and some Petro-states have had a hand in it too. Nevertheless, the impact on the UK is unique, particularly aggressive, and began 40 years ago with Thatcher’s flawed ideology (privatisation at any cost) which has been perpetuated by vested interests with the support of politicians of every creed ever since.

Refuse to accept responsibility for Big Energy’s failure.

You can’t eat a Credit Score! 88% of all UK households are going to be in energy poverty by January 2023. To stay out of energy poverty as defined by the World Health Organisation and others, the average household annual income will need to be above £60,000 after tax and deductions.

On top of that, small business County Court Judgements are up 157% to 22,552 in the quarter to March 2022. Accountants regard CCJs as a forecast of business bankruptcies. So, we can expect to lose yet more of the economy due to the government’s bad management. On the ground, this will mean a surge in SME closures, deserted town centres, burgeoning unemployment and the loss of key services such as childcare and elderly care.

So, forget your credit score, it means nothing. Let’s deal with what’s facing you right now which for many, many people is whether to eat or heat. My answer is to do both if you can! (Those on key meters are caught between a rock and a hard place and must find alternative methods.) We all have nothing to lose, regardless of how we pay for our energy, so we fight with whatever comes to hand.

Take action now! Change all your Direct Debits to Standing Orders and spread only what you can afford between them all. The so-called debt these monopolies will accuse you of running up is not actual debt because it is not money you have agreed to owe.* The best way for them to resolve the problem they are trying to make you responsible for is for them to forfeit some of their profit. Simple really.

* For a debt to exist both parties must agree that it does. Normalising any other system leads to financial anarchy where anyone can simply raise a bill for any amount, for any reason, and demand payment from anyone. This is the model monopolies and cartels employ.

Capitalise on their confusion: It’s expected that by the first quarter of 2023, 20 million households will be struggling. If every single one of us said, “No, enough is enough!” and pay only what we can comfortably afford, imagine how quickly things would change. In a similar vein, even if only 2.5% (0.5 million) of all struggling households are actively “chased” by suppliers, they simply won’t have enough call centre agents or administrators to do so effectively. Their system will break. So hang in there, do not respond to them, in fact just ignore them.

Invest heavily in building insulation and heating improvements (old and new stock) as well as sustainable energy resources.

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© Rod McRiven 2022

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